Trustee of tomorrow needs holistic view of duties

Retaining the public’s trust, embracing technological advancements and ensuring the superannuation industry stays true to its roots as a social movement were among the issues a panel of four fund directors saw as the challenges facing the trustee of tomorrow.

Tasplan Super independent chair Naomi Edwards said it was important trustees made sure they spent enough time engaging with staff and fund members to “take the pulse” of their organisation’s culture.

Edwards also revealed she likes to open accounts with other super funds to glean insights into how they are using technology and engaging with their members.

“Informal interactions with staff are very important and it helps if you can come to them with ideas to open up a dialogue,” she said. “There are lots of ways to get the vibe of the organisation. I encourage you to listen in at the call centre to get an understanding of your members.”

Edwards predicted that over the coming decade, funds and their trustees will come under increased direct pressure from members concerned about the environmental, social and governance impacts from the ways their money is invested.

“I really hope that by 2030, industry super funds will be significant social impact investors, we will be the largest group of asset owners in the country, bar none, and that presents a tremendous opportunity, especially given our profit-to-member ethos.”

TWUSUPER trustee, and Transport Workers Union of Australia national secretary, Tony Sheldon, said he believes industry super funds are fundamentally different to banks or other financial institutions because they are aligned with an important social movement – ensuring workers have dignity in retirement.

Sheldon urged his fellow industry fund trustees to take a more proactive role in campaigning for policy reforms that would benefit their members.

“Why aren’t we campaigning for the super guarantee to be lifted to 15 per cent?” he asked.

Sheldon also argued that trustees should be brave in speaking up for a “holistic interpretation” of the sole-purpose test, an aspect of superannuation law that dictates trustees must act solely in the interest of members.

While this has traditionally been interpreted as meaning trustees have to prioritise financial returns, it is increasingly being viewed through a wider lens that encompasses other factors contributing to members’ wellbeing in retirement.

Sheldon made the point with reference to the Aerocare scandal of 2017, in which it was exposed that the airport servicing company was exploiting workers and breaching workplace regulations. A number of super funds were invested in the company via its private equity backer. TWUSUPER was not invested in Aerocare.

“They were actually advertising that the reason to invest was that they had a non-union agreement in place that allowed them to have a ‘flexibile’ workforce, so in a situation like that, we have to ask ourselves as trustees if that fits the sole-purpose test,” Sheldon said. “What responsibility would we have had if we had enabled and encouraged, via our investment, a company to drive down SG payments across the entire sector?”

“Our members wear multiple hats – worker, union member, investor, citizen – and what is in the best interests of them in one of those roles may be in conflict with another,” Mohle explained. “So, the lines are really blurred and we need to be thinking more holistically about what a good retirement means for members.”

Australian Council of Trade Unions assistant secretary Scott Connolly expressed his fears that the “financialisation” of industry super funds would detract from the role of representative trustee directors.

All of the speakers made their comments at the Conference of Major Superannuation Funds 2018, being held in Brisbane, March 14-16. The session, titled “The trustee of tomorrow”, was facilitated by Schroder Investment Management Australia institutional client director Kerrie Howard.

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